This paper details the status of renewable-energy (RE) developments in Arab countries (AC) as an essential element for the sustainable economic development of these countries, despite their wealth in oil and gas. The paper first presents a review of the RE resources in AC and sheds light on some achieved and/or ongoing RE projects in the region. It also examines the adequacy of the present national institutions responsible for RE developments, and evaluates the effectiveness of work programmes of major regional and international organizations supporting RE activities. Finally, the paper identifies major obstacles hindering the large-scale penetration of RE into the energy markets of AC, and draws conclusions for increasing RE contribution to those markets.